Learning is an integral part of business growth. Yet as business owners, we’re often so wrapped up with day-to-day running of the business that we miss opportunities to learn from prior years.
2012 was a difficult year for SMBs, so it’s hard to be excited about looking back at all for some, let alone reflecting on lessons learnt. I get it. Then again, I’m also a firm believer that the best learnings are the ones available to us when times are tough. For instance, I like inspecting potential properties to buy when there’s a storm or a downpour, especially for older style properties. It’s a great opportunity to check for leaks, drainage issues and any other risks related to existing plumbing works. Similarly, understanding how your business performs in a year like 2012 can prove invaluable to understanding how well your business holds up against similar or perhaps even tougher conditions.
Unfortunately many SMEs did not meet their original revenue and profit targets for 2012. In fact, with the state of our local economy, and the patchy conditions that many businesses have described, it's no wonder confidence amongst many SMBs remained relatively subdued throughout the year. But what if it's the kind of “storm” your business should have been able to shelter against more confidently back in 2012? Even if it did weather the storm comfortably back then, are you confident that your business will always continue to do so in future?
Imagine you’ve just inherited a house with all sorts of problems; leaky roof, blocked drains outdoor, a blocked toilet and a leaking shower. In which order would you fix the problems? How would you decide, especially when water is gushing into the house? By the same token, how did you address any cash flow shortage in 2012? Did you spend even more to increase sales and marketing to try and break out of the cycle? Or did you try and cut cost by reducing staff? Or did you simply chose to do nothing but batten down and wait until the storm is over. What, if anything, were the underlying drivers for your business decisions in 2012 or were they mere instincts? What then will you change in 2013?
Don’t get me wrong; I’m not talking doom and gloom. And although 2012 was a tough year, I wouldn’t necessary equate it to water gushing into your house. In fact, your business could be doing very well already. In any case, I'd argue that an in-depth understanding of possible scenarios and learn how you make decisions can help your business become more resilient. There are no straight answers here, because it’s not a one-size-fits-all, especially when different businesses in different industries at different stage of growth, have vastly different drivers.
For example, as a startup in our first year of incorporation, our business drivers for SavvySME in 2012 quickly turned from becoming less about financial drivers, to a lot more about customer experience. Our vision hasn't changed. We just decided to focus on building one product, but create the best user experience possible to drive long-term growth. So we focused on the collaboration side of the platform, and delayed the release of the marketplace for time being. Another good example is that instead of spending big on marketing, we focused on organic growth and quality content whilst we refine the site based on your feedback of its beta release.
So the questions remain: What did you learn about your business in 2012? What are your business drivers? Do you know? If so, is your business ready for an upswing when the tide turns?